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|source=—[[Horace Hayman Wilson]] on grant of duty-free trade to British manufactures in India and imposition of duty on goods exported to England by Indian manufacturers.<ref>{{Harvnb|Wilson|1845|p=539}} (footnote)</ref>}}
|source=—[[Horace Hayman Wilson]] on grant of duty-free trade to British manufactures in India and imposition of duty on goods exported to England by Indian manufacturers.<ref>{{Harvnb|Wilson|1845|p=539}} (footnote)</ref>}}


After gaining the right to collect revenue in Bengal in 1765, the Company largely ceased importing [[Bullion#Bullion|gold and silver]], which it had hitherto used to pay for goods shipped back to Britain.<ref name=robb-131-134>{{Harvnb|Robb|2004|pp=131-134}}</ref> In addition, as under [[Mughal Empire|Mughal rule]], land revenue collected in the [[Bengal Presidency]] helped finance the Company's wars in other part of India.<ref name=robb-131-134/> Consequently, in the period 1760-1800, Bengal's [[money supply]] was greatly diminished; furthermore, the closing of some local mints and close supervision of the rest, the fixing of exchange rates, and the standardization of [[coinage]], paradoxically, added to the economic downturn.<ref name=robb-131-134/> During the period, 1780-1860, India changed from being an exporter of processed goods for which it received payment in [[bullion]], to being an exporter of [[raw materials]] and a buyer of [[manufactured goods]].<ref name=robb-131-134/> More specifically, in the 1750s, mostly fine cotton and silk was exported from India to markets in Europe, Asia, and Africa; by the second quarter of the 19th century, raw materials, which chiefly consisted of raw cotton, opium, and indigo, accounted for most of India's exports.<ref name=peers-48-49>{{Harvnb|Peers|2006|pp=48-49}}</ref> Also, from the late 18th century British cotton mill industry began to lobby the government to both tax Indian imports and allow them access to markets in India.<ref name=peers-48-49/> Starting in the 1830s, British textiles began to appear in&mdash;and soon to inundate&mdash;the Indian markets, with the value of the textile imports growing from £5.2 million 1850 to £18.4 million in 1896.<ref>{{Harvnb|Farnie|1979|p=33}}</ref> The [[American Civil War]] too would have a major impact on India's cotton economy: with the outbreak of the war, American cotton was no longer available to British manufacturers; consequently, demand for Indian cotton soared, and the prices soon quadrupled.<ref>{{Harvnb|Misra|1999|p=18}}</ref> This led many farmers in India to switch to cultivating cotton as a quick cash crop; however, with the end of the war in 1865, the demand plummeted again, creating another downturn in the agricultural economy.<ref name=peers-48-49/>
After gaining the right to collect revenue in Bengal in 1765, the [[East India Company]] largely ceased importing [[Bullion#Bullion|gold and silver]], which it had hitherto used to pay for goods shipped back to Britain.<ref name=robb-131-134>{{Harvnb|Robb|2004|pp=131-134}}</ref> In addition, as under [[Mughal Empire|Mughal rule]], land revenue collected in the [[Bengal Presidency]] helped finance the Company's wars in other part of India.<ref name=robb-131-134/> Consequently, in the period 1760-1800, Bengal's [[money supply]] was greatly diminished; furthermore, the closing of some local mints and close supervision of the rest, the fixing of exchange rates, and the standardization of [[coinage]], paradoxically, added to the economic downturn.<ref name=robb-131-134/> During the period, 1780-1860, India changed from being an exporter of processed goods for which it received payment in [[bullion]], to being an exporter of [[raw materials]] and a buyer of [[manufactured goods]].<ref name=robb-131-134/> More specifically, in the 1750s, mostly fine cotton and silk was exported from India to markets in Europe, Asia, and Africa; by the second quarter of the 19th century, raw materials, which chiefly consisted of raw cotton, opium, and indigo, accounted for most of India's exports.<ref name=peers-48-49>{{Harvnb|Peers|2006|pp=48-49}}</ref> Also, from the late 18th century British cotton mill industry began to lobby the government to both tax Indian imports and allow them access to markets in India.<ref name=peers-48-49/> Starting in the 1830s, British textiles began to appear in&mdash;and soon to inundate&mdash;the Indian markets, with the value of the textile imports growing from £5.2 million 1850 to £18.4 million in 1896.<ref>{{Harvnb|Farnie|1979|p=33}}</ref> The [[American Civil War]] too would have a major impact on India's cotton economy: with the outbreak of the war, American cotton was no longer available to British manufacturers; consequently, demand for Indian cotton soared, and the prices soon quadrupled.<ref>{{Harvnb|Misra|1999|p=18}}</ref> This led many farmers in India to switch to cultivating cotton as a quick cash crop; however, with the end of the war in 1865, the demand plummeted again, creating another downturn in the agricultural economy.<ref name=peers-48-49/>


At this time, the East India Company's trade with China began to grow as well. In the early 1800s demand for Chinese tea had greatly increased in Britain; since the money supply in India was restricted and the Company was indisposed to shipping bullion from Britain, it decided upon [[opium]], which had a large underground market in China and which was grown in many parts of India, as the most profitable form of payment.<ref name=peers-49>{{Harvnb|Peers|2006|p=49}}</ref> However, since the Chinese authorities had banned the importation and consumption of opium, the Company engaged them in the [[First Opium War]], and at its conclusion, under the [[Treaty of Nanjing]], gained access to five Chinese ports, [[Guangzhou]], [[Xiamen]], [[Fuzhou]], [[Shanghai]], and [[Ningbo]]; in addition, [[Hong Kong]] was ceded to the [[British Crown]].<ref name=peers-49/> Towards the end of the second quarter of the 19th century, opium export constituted 40% of India's exports.<ref>{{Harvnb|Washbrook|2001|p=403}}</ref>
At this time, the East India Company's trade with China began to grow as well. In the early 1800s demand for Chinese tea had greatly increased in Britain; since the money supply in India was restricted and the Company was indisposed to shipping bullion from Britain, it decided upon [[opium]], which had a large underground market in China and which was grown in many parts of India, as the most profitable form of payment.<ref name=peers-49>{{Harvnb|Peers|2006|p=49}}</ref> However, since the Chinese authorities had banned the importation and consumption of opium, the Company engaged them in the [[First Opium War]], and at its conclusion, under the [[Treaty of Nanjing]], gained access to five Chinese ports, [[Guangzhou]], [[Xiamen]], [[Fuzhou]], [[Shanghai]], and [[Ningbo]]; in addition, [[Hong Kong]] was ceded to the [[British Crown]].<ref name=peers-49/> Towards the end of the second quarter of the 19th century, opium export constituted 40% of India's exports.<ref>{{Harvnb|Washbrook|2001|p=403}}</ref>
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Another major, though erratic, export item was [[indigo dye]], which was extracted from [[Indigofera tinctoria|natural indigo]], and which came to be grown in Bengal and northern [[Bihar]].<ref name=metcalf-metcalf-76>{{Harvnb|Metcalf|Metcalf|p=76}}</ref> In late 17th and early 18th century Europe, blue apparel was favored as a fashion, and blue uniforms were common in the military; consequently, the demand for the dye was high.<ref name=bose-jalal-71-72>{{Harvnb|Bose|Jalal|2003|pp=71-72}}</ref> In 1788, the East India Company offered advances to ten British planters to grow indigo; however, since the new (landed) property rights defined in the [[Permanent Settlement]], didn't allow them, as Europeans, to buy agricultural land, they had to in turn offer cash advances to local peasants, and sometimes coerce them, to grow the crop.<ref name=bando-125>{{Harvnb|Bandyopadhyay|2004|p=125}}</ref> The European demand for the dye, however, proved to be unstable, and both creditors and cultivators bore the risk of the market crashes in 1827 and 1847.<ref name=metcalf-metcalf-76/> The peasant discontent in Bengal eventually led to the ''Indigo rebellion'' in 1859-60 and to the end of indigo production there.<ref>{{Harvnb|Bandyopadhyay|2004|p=125}}, {{Harvnb|Bose|Jalal|2003|pp=71-72}} </ref> In [[Bihar]], however, indigo production continued well into the 20th century; the centre of indigo production there, [[Champaran]] district, became the staging ground, in 1917, for [[Mohandas Karamchand Gandhi]]'s first experiment in [[non-violent resistance]] against the [[British Raj]].<ref name=bose-jalal-71-72/>
Another major, though erratic, export item was [[indigo dye]], which was extracted from [[Indigofera tinctoria|natural indigo]], and which came to be grown in Bengal and northern [[Bihar]].<ref name=metcalf-metcalf-76>{{Harvnb|Metcalf|Metcalf|p=76}}</ref> In late 17th and early 18th century Europe, blue apparel was favored as a fashion, and blue uniforms were common in the military; consequently, the demand for the dye was high.<ref name=bose-jalal-71-72>{{Harvnb|Bose|Jalal|2003|pp=71-72}}</ref> In 1788, the East India Company offered advances to ten British planters to grow indigo; however, since the new (landed) property rights defined in the [[Permanent Settlement]], didn't allow them, as Europeans, to buy agricultural land, they had to in turn offer cash advances to local peasants, and sometimes coerce them, to grow the crop.<ref name=bando-125>{{Harvnb|Bandyopadhyay|2004|p=125}}</ref> The European demand for the dye, however, proved to be unstable, and both creditors and cultivators bore the risk of the market crashes in 1827 and 1847.<ref name=metcalf-metcalf-76/> The peasant discontent in Bengal eventually led to the ''Indigo rebellion'' in 1859-60 and to the end of indigo production there.<ref>{{Harvnb|Bandyopadhyay|2004|p=125}}, {{Harvnb|Bose|Jalal|2003|pp=71-72}} </ref> In [[Bihar]], however, indigo production continued well into the 20th century; the centre of indigo production there, [[Champaran]] district, became the staging ground, in 1917, for [[Mohandas Karamchand Gandhi]]'s first experiment in [[non-violent resistance]] against the [[British Raj]].<ref name=bose-jalal-71-72/>

==See also==
==See also==
*[[Economy of India under the British Raj]]
*[[Economy of India under the British Raj]]

Revision as of 01:07, 25 February 2009

The Economy of India under Company rule describes the economy of those regions (contemporaneously British India) that fell under Company rule in India during the years 1756 to 1857.

History

"It was stated in evidence (in 1813) that the cotton and silk goods of India, up to this period, could be sold for a profit in the British market at a price from 50 to 60 per cent. lower than those fabricated in England. It consequently became necessary to protect the latter by duties of 70 or 80 per cent. on their value, or by positive prohibition. Had this not been the case, had not such prohibitory duties and decrees existed, the mills of Paisley and of Manchester would have been stopped in their outset, and could hardly have been again set in motion, even by the powers of steam. They were created by the sacrifice of the Indian manufactures. Had India been independent, she would have retaliated; would have imposed preventive duties upon British goods, and would thus have preserved her own productive industry from annihilation. This act of self-defence was not permitted her; she was at the mercy of the stranger. British goods were forced upon her without paying any duty; and the foreign manufacturer employed the arm of political injustice to keep down and ultimately strangle a competitor with whom he could not contend on equal terms."

—Horace Hayman Wilson on grant of duty-free trade to British manufactures in India and imposition of duty on goods exported to England by Indian manufacturers.[1]

After gaining the right to collect revenue in Bengal in 1765, the East India Company largely ceased importing gold and silver, which it had hitherto used to pay for goods shipped back to Britain.[2] In addition, as under Mughal rule, land revenue collected in the Bengal Presidency helped finance the Company's wars in other part of India.[2] Consequently, in the period 1760-1800, Bengal's money supply was greatly diminished; furthermore, the closing of some local mints and close supervision of the rest, the fixing of exchange rates, and the standardization of coinage, paradoxically, added to the economic downturn.[2] During the period, 1780-1860, India changed from being an exporter of processed goods for which it received payment in bullion, to being an exporter of raw materials and a buyer of manufactured goods.[2] More specifically, in the 1750s, mostly fine cotton and silk was exported from India to markets in Europe, Asia, and Africa; by the second quarter of the 19th century, raw materials, which chiefly consisted of raw cotton, opium, and indigo, accounted for most of India's exports.[3] Also, from the late 18th century British cotton mill industry began to lobby the government to both tax Indian imports and allow them access to markets in India.[3] Starting in the 1830s, British textiles began to appear in—and soon to inundate—the Indian markets, with the value of the textile imports growing from £5.2 million 1850 to £18.4 million in 1896.[4] The American Civil War too would have a major impact on India's cotton economy: with the outbreak of the war, American cotton was no longer available to British manufacturers; consequently, demand for Indian cotton soared, and the prices soon quadrupled.[5] This led many farmers in India to switch to cultivating cotton as a quick cash crop; however, with the end of the war in 1865, the demand plummeted again, creating another downturn in the agricultural economy.[3]

At this time, the East India Company's trade with China began to grow as well. In the early 1800s demand for Chinese tea had greatly increased in Britain; since the money supply in India was restricted and the Company was indisposed to shipping bullion from Britain, it decided upon opium, which had a large underground market in China and which was grown in many parts of India, as the most profitable form of payment.[6] However, since the Chinese authorities had banned the importation and consumption of opium, the Company engaged them in the First Opium War, and at its conclusion, under the Treaty of Nanjing, gained access to five Chinese ports, Guangzhou, Xiamen, Fuzhou, Shanghai, and Ningbo; in addition, Hong Kong was ceded to the British Crown.[6] Towards the end of the second quarter of the 19th century, opium export constituted 40% of India's exports.[7]

  • Photograph of East India Company factory in Painam, Sonargaon, Bangladesh, a major producer of the celebrated Dhaka muslins.
    Photograph of East India Company factory in Painam, Sonargaon, Bangladesh, a major producer of the celebrated Dhaka muslins.
  • "Mellor Mill" in Marple, Greater Manchester, England, was constructed in 1790-93 for manufacturing muslin cloth.
    "Mellor Mill" in Marple, Greater Manchester, England, was constructed in 1790-93 for manufacturing muslin cloth.
  • Opium Godown (Storehouse) in Patna‎, Bihar (c. 1814). Patna was the centre of the Company opium industry.
    Opium Godown (Storehouse) in Patna‎, Bihar (c. 1814). Patna was the centre of the Company opium industry.
  • Indigo dye factory in Bengal. Bengal was the world's largest producer of natural indigo in the 19th century.
    Indigo dye factory in Bengal. Bengal was the world's largest producer of natural indigo in the 19th century.

Another major, though erratic, export item was indigo dye, which was extracted from natural indigo, and which came to be grown in Bengal and northern Bihar.[8] In late 17th and early 18th century Europe, blue apparel was favored as a fashion, and blue uniforms were common in the military; consequently, the demand for the dye was high.[9] In 1788, the East India Company offered advances to ten British planters to grow indigo; however, since the new (landed) property rights defined in the Permanent Settlement, didn't allow them, as Europeans, to buy agricultural land, they had to in turn offer cash advances to local peasants, and sometimes coerce them, to grow the crop.[10] The European demand for the dye, however, proved to be unstable, and both creditors and cultivators bore the risk of the market crashes in 1827 and 1847.[8] The peasant discontent in Bengal eventually led to the Indigo rebellion in 1859-60 and to the end of indigo production there.[11] In Bihar, however, indigo production continued well into the 20th century; the centre of indigo production there, Champaran district, became the staging ground, in 1917, for Mohandas Karamchand Gandhi's first experiment in non-violent resistance against the British Raj.[9]

See also

Notes

  1. ^ Wilson 1845, p. 539 (footnote)
  2. ^ a b c d Robb 2004, pp. 131–134
  3. ^ a b c Peers 2006, pp. 48–49
  4. ^ Farnie 1979, p. 33
  5. ^ Misra 1999, p. 18
  6. ^ a b Peers 2006, p. 49
  7. ^ Washbrook 2001, p. 403
  8. ^ a b Metcalf & Metcalf, p. 76
  9. ^ a b Bose & Jalal 2003, pp. 71–72
  10. ^ Bandyopadhyay 2004, p. 125
  11. ^ Bandyopadhyay 2004, p. 125, Bose & Jalal 2003, pp. 71–72

References

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